Written by
Ruzanna Queenan, CFA
August 24, 2021
Realtor Success

The Freedom Number: What It Is and Why You Need to Know Yours

For many realtors, the idea of financial freedom feels like a pipe dream. Sure it would be great not having to worry about working the phones, scheduling open houses, or selling a certain number of homes to support your lifestyle, but the thought of working less is completely inconceivable.

And for good reason. 

The real estate industry is a tough business. Competition is fierce and when the market is buzzing there is little time to stop and take a breath.

It's no surprise then that many realtors find themselves in a constant state of stress, worrying about when they will reach a level of success that will allow them to take a step back and actually enjoy the fruits of their labor. 

And yet, it is possible to achieve the elusive financial freedom that so many dream of. 

The key? 

Knowing your "freedom number." 


Freedom number - these two words don’t quite fit together and it’s an odd juxtaposition of seemingly opposing concepts:  the words “freedom” and a number.

But, despite the strange pairing, there is something to be said for knowing what your financial freedom number is - that point in which you have enough money saved up so that you can feel comfortable with walking away (or simply taking a step back) from an otherwise lucrative career. 

It's that moment when your monthly expenses are covered and there is enough money left over to do things that you enjoy - travel, be with family, take up a new hobby, help others.

It's that level of success in which you have the luxury of working fewer hours and having more time outside your career. 

The question, of course, is how do you know what your financial freedom number is?


Now that we've established what a freedom number is, let's talk about what it is not. 

Your freedom number is not some arbitrary number that you put in your head and just say to yourself, "I'm going to save this much money."

The whole, “I want to save $________ because that's what others say success is,” does not help you achieve your goals or create a path to the life you desire to live. 

The key is knowing what your needs and goals are so that you can calculate how much money it takes for you to reach that level of success.

The first thing that needs to happen is an honest assessment of what you really want in life. 

And remember, this is not just related to money and career success. 

This is about finding out what truly makes you happy and feeling good -- outside of work hours.

Do you want to live a simple life in a quiet place away from the noise of the city or do you dream of a fast-paced life in the middle of the hustle and bustle? 

Would you like to spend more time on philanthropic efforts?  

Do you want to be able to travel more with your family? 

These are important questions and the answers will help shape a number that is right for you.

It's important that you're also very specific about how much it would cost to live that type of life (i.e., is that $100k/year or $1 million?). 

Once you have that in mind, the next step in figuring out your specific financial goal as it relates to achieving "freedom" status (or at least a version of it) is to calculate your monthly expenses. 

This can be done by simply listing all of your known expenditures - including mortgage/rent, utilities, cell phone bills, car payments, groceries, and the like. This will give you an approximation of how much money you need to have saved up every month in order to cover your monthly expenses. 

Next, you need to figure out how much money is needed for unexpected events - which can be estimated by calculating the average cost of a single event multiplied by twelve (the number of months per year). 

This will give you an approximation as to what that yearly total would be.

Finally, if you've been in the industry for a while or have some idea of how much money you take home from commissions and other sources on an annual basis, take that number and multiply it by 20 (the expected duration of your career). 

This will give you an approximation as to what needed funds might be required at the end of your career.

The number you come up with after this is the amount that would be required to cover any financial goals or savings needs on a yearly basis - and it's important to note here that this figure does not include retirement contributions, which can also be significant for realtors at the end of their careers.


The truth is, financial freedom may not be as far off as you think if you set it as one of your goals and start planning for it. 

The difference between the two is that when you have a goal, there's no set time frame and you're not stressing about how to get there. 

Rather, your focus can be on living in the moment while still being able to save money without sacrificing too much of what makes life enjoyable. 

With a plan, you know how much money is required on a monthly basis in order to reach the goal. 

It reminds me of a recent conversation that I had with a top realtor who came to me to find her freedom number. While I could have easily calculated a number based on the information she provided, I first took time understanding her life, how she thinks, feels, and what makes her happy vs anxious. 

It was only once I understood those things that I felt comfortable providing her freedom number because I knew what she needed emotionally. 

You could visually see her body language change and by the time our meeting ended, she explained the relief she felt knowing that although she would continue working as a realtor for a few more years, it was all for a goal and there was an end in sight.

And I’ll tell you what I told her.

It's important to understand that the number you come up with is not a final answer. 

Rather, it should be considered as a guideline for your goals and future savings needs - so if you find yourself changing jobs or experiencing much more income than usual (think of all those bonuses), then use these numbers as an approximation.  

The point is to start thinking about your future and the best way to do that is through a financial freedom number. 

This number will help you set your goals, plan for them, and achieve those long-term savings needs without feeling like "work." It's all too easy to spend time focusing on how far we are away from our goals, but by doing the math and understanding your financial freedom number you'll be able to put more focus on what really matters.

Ruzanna Queenan, CFA

I am Ruzanna, the President of Queenvest. Like many women, I wasn’t always good with money, but I learned through many years of work in the financial industry how to use money well. I am fortunate to have the opportunity to help strong, ambitious business owners and executives take control of their money and ultimately, their personal success.